The Truth About Email Marketing, Part 2 (Audio Podcast Transcript)

Simms Jenkins and Mike Moran discuss "The Truth About Email Marketing" in part two of this 3-part series. Learn about the opportunities and challenges of Email marketing and learn easy-to-use techniques that drive sales and build relationships.

MM:So, Simms is an email marketing expert. Simms,
I think one of the things that people want to know about email marketing (and I
know that it’s something you cover in your book) is how do you calculate
return on investment in email marketing? I think everybody throws ROI around
like it’s some kind of mantra, and I think most people really don't know
what it's about. So how do you take something like email marketing and figure
out how you can tell a hard nose business executive that this is something that
he’s really going to see return on his investment?

Simms Jenkins: Right,
Mike, that's one of the most important challenges as well as probably the
biggest opportunities that email marketing professionals have. Because email is
seen as a nice effective of tool, but at the end of the day it often doesn't get
quite the respect or recognition by the corner suites: particularly the CFOs
want to know, “Yeah, email is nice, but what is it doing to impact our
business?” Email, according the DMA, delivers almost a $50 return on
investment for every dollar spent. That's unmatched in terms of direct
marketing. It's really strong and the DMA calculates that based on the
investments in the email which can be staff and creative development, delivery
cost, list acquisition cost, and return on it. The return is generally going to
be sales and revenue as a result of the email, and for different types of
companies that's going to come through their websites, through their retail
stores, through their 1-800 numbers, and through their catalogue.

So that's the thing about email that's often overlooked as well
is that email doesn't have to be: send an email now; if they click and buy, it's
a success or a failure. Emails often get to play a part of relationship building
and drive a subtle response that often results in sales. We do work for a major
restaurant client that has a national network of restaurants. We’re not
selling burgers over the internet; we’re trying to stay top of mind,
building the relationship with their customers, and using email as really just
another communication hub so that the next time they’re thinking about
where to dine with their family or go out to lunch with colleagues that they
choose this restaurant.

Email is going to help get that done, and we’re able to it
because we have some different programs tied to email and delivering special
offers on their people's birthdays as well as the occasional promotional offer.
We’re able to tie directly the revenues associated because of that email
back to the cost which is kind of the original question, Mike, of ROI. We know
how successful the email program is and to a dollar how much revenue has been
generated because of the email program that has been sent.

MM:So, how do you get a customer to tell you that
they have come from your email program? It seems to me that part of what you
need to do is to craft an experience that's going to cause the customer to
engage in behavior that will show you that they came from that original email.
How do craft that kind of experience and make it something that feels natural
for the customer to do?

SJ: Right. There are
different ways to do that and sometimes the easiest way is to have a
“print this out and bring it into the store or the restaurant” and
have a robust POS system that's going to be able to track that, but of course
not every company is setup like that. We’ve worked for some companies that
have multichannels and so many different marketing programs going on that they
track email’s influence based on: they know what that person bought and
they’ll go back and look at their email metrix; if that person opened an
email, they’ll give that email part of the essential success rate for
getting that person to buy whether it was in the store or over the internet or
over the phone. But that’s sometimes misleading because email is one of
those things that can play a secondary role. Too many people rely on email to be
the sole driver of sales, and a lot of companies often have the mode
(particularly retailers) of, “It's a slow week, let’s send out
another email.” even though they might have sent an email two days ago,
and that can really hurt the overall relationship with your customers. You can
deliver email fatigue, which while there might be some short term gains from
that, long term you’re going to have people start to drop off the list or
maybe become emotionally unsubscribed, or they’re just going start tuning
out your email. So it's really a fine balance of driving sales and building
relationships, but also respecting that you can't go too frequently on emails;
people do get annoyed or unsubscribe.

MM:Do you find that companies that have a
background in direct mail (either catalogues or maybe those direct mail letters)
have a better ability to setup the experience so that they can track the return
on investments than a company that maybe doesn't have that kind of direct
marketing experience?

SJ: That's a good
question Mike. I’ll probably upset some people by saying it, but most
traditional direct marketers I think do a pretty poor job on email. They might
have some good systems setup, and they have some real strong analytical
infrastructure setup to view the back end of how successful email is, but on the
front end (which is what I mean by actually crafting and delivering a message
that's going to show up properly in the inbox and get a response) most catalogue
direct mail type companies do a pretty poor job because, again, direct email is
not direct mail online.

Direct email and direct mail are completely different ballgames.
A lot of people are just taking their direct mail pieces, scanning them, and
converting them from a JPEG to an HTML email and sending it; it doesn't work
that way. We see way too many catalogue companies sending emails that mirror
their exact catalogue cover, and while it looks very pretty if it actually
renders itself the way that was originally designed in your inbox that's great,
but over half your audience is probably going to have images turned off or not
be able to support large images and not be sure where the links are and what
they’re supposed to do. So that approach of: if it works in direct mail or
your catalogue, put it in the email and fire it off; that doesn’t work
well. So the first part of the answer is that they do a good job of measuring
success, but they don't set themselves up to really capture that success.

MM:Well that's fascinating to me, Simms, because
I would have expected them to have a big advantage because of their direct
marketing experience. But what you’re saying is that they have so much
experience that they don't realize that they have things to learn, so
they’re actually less open to understanding the things that are different
about email marketing than just applying the things that they’ve known and
worked in the past. I wouldn't guess that.

SJ: And of course there
are some exceptions and there are many out there, but as a whole I find that
definitely there’s a little bit of a legacy arrogance that carries over
— the idea that email is easy; we know what we’re doing; we’ve
been doing direct mail for 20 years. I am not a direct mail expert, but I think
partially because of that I don't have carryover of certain expectations or
false assumptions based on what can work there will work on email.

MM:
Alright. I think we’ve seen a little bit of the opportunity of email
marketing and return on investment. I think we’ve just started to hit on a
couple of the challenges. One of the challenges is that if you don't have a
direct marketing background, you’re unlikely to be very good at
calculating that ROI. And if you do have a direct marketing background, you
might have a blind spot for how you need to be relevant in permission based as
opposed to what you did in offline direct mail marketing. So those are two
challenges I could see. What other challenges are there in email marketing? What
are the really big ones that a company that's going into this has to really keep
in mind?

SJ: Well, we find the
biggest challenge is that to do email well you need a lot of different
resources. Whether that's a lot of different bodies on the ground, good
partners, or a large budget, it’s really difficult to do email and give it
everything it has. There are a few programs that are world class email programs.
Forrester did a report a few years back and reviewed 53 programs, I believe, of
52 they gave failing marks. I think that's mainly because you have just a very
disproportionate amount of resources and team members that are working on email
marketing programs, that’s somewhat due to the reputation that email is
efficient and that should be cheap, so you’re not going to throw a lot of
resources at it. But I’ve read some other reports that said emails are
victims of its own success. That because the perception that email's so
effective and delivers such a strong ROI, that people aren't willing to commit
more resources, which is kind of baffling to me to a certain extent.

But without a doubt, because of the cycle of never ending
campaigns for most companies, people find it very difficult to make improvements
in what we call the strategic optimization of email programs, which is really
why we exist. It’s because there are very few companies whether
you’re a director or vice president or manager or coordinator and
you’re involved in an email program, there is always that next campaign
that's coming right around the corner. It's not like direct mail or radio and
some other things that once it's out, you can take a couple of weeks off to
think about the next campaign that isn’t coming around for four months. In
email, if you get an email campaign out on Tuesday night, the email that needs
to go out on Friday has already started to be proofed and processed and coded
and tested and things of that nature. So it's really hard to stop and focus on
testing, making improvements, looking at your results to better future
campaigns, and thinking in a strategic way rather than in an execution of facts,
which is really what most people are focusing on probably because they just
don't have the time and resources to that step back and look at the big
picture.

MM:Do you find that sometimes people hold email
and other kinds of internet marketing to a higher standard in terms of return on
investment than they would for things like TV or print just because you can
calculate the ROI and with traditional media you can’t?

SJ: I think, yes,
absolutely. I think that certainly email and some of the other online marketing
and search are right up there at the top; they’re probably the two most
measurable, targeted and efficient ways to communicate to people and to deliver
relevant messages. I think that there’s definitely a bias of old media,
and a lot of the people that control the advertising strings of the world are
trying to keep email and search kind of as niche plays when you think that they
would get a little bit more attention because of the fact that they are so
measurable and they are also targeted. And throwing a million dollar set of a TV
buys, you’re lucky if five percent of your audience is paying attention to
your message and maybe even less than that is actually interested in your
product. Where generally marketing channels like email, these people have
provided permission to you, and that means that they’re very interested in
what you’re providing. So the general concept (and obviously I’m
biased) just begs for more resources and attention because of the nature of what
permission email marketing is versus the general mass media buys.

MM:Well Simms, I’ve already learned stuff
on email marketing just from these broadcasts, and I am supposed to be an
expert. I’m sure that there is a lot more stuff in your book that the
folks listening to this Podcast will want to pay attention to. Tell me what you
think the difference is between your book and other email marketing and
interactive marketing books?

SJ: Well, Mike, I think
that this book is really approachable, and frankly there aren’t a lot of
books on the subject despite its importance in terms of marketing and consumers.
But I think that this book will really be a appealing to people whether
they’re a senior vice president of a big brand or they’re a small
business owner that they’ll be able to really get a lot out of it as well
as the people that are in the trenches of managing an email marketing program. I
think that it will reaffirm some best practices of attention and efforts that
they’ve worked on as well as getting some new ideas. So I think it really
covers the gamut and really has a lot of value to people regardless of where
they are in the email cycle of knowledge. I think we go into some key topics
fairly in depth without getting too much into the weeds. I think it's really
going to be a good read as well as helpful to a lot of people regardless of
their background and level of expertise.

MM:
Well that's good Simms. If it’s piqued your interest, I hope you’ll
go to thetruthaboutemailmarketing.com
and that you’ll check out Simms’ new book, which is called you might
expect, The
Truth About Email Marketing. I also hope you’ll give a listen to the
other two segments of this Podcast Series. In our first segment, we talked about
the basics of the email marketing, and this wraps up part two of our series. I
hope you will comeback for our third part. We will talk about the winners in
email marketing now and in the future. Thanks for listening.